Charities ‘squeezed out’ of clothes bank market
30 January 2012
Two textile recycling charities have claimed they are being ‘squeezed out’ of the textile bank market because local authorities are signing more contracts with private companies.
The concerns have been raised by the Salvation Army and TRAID. According to the Salvation Army, which has the largest share of the UK textile bank market, it has lost over 1,000 textile banks due to councils signing contracts within the private sector. It now runs 5,000 of the UK’s estimated 12,000 textile banks.
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- A Traid charity bank: the charity is one with concerns about the ability of charities to compete with the private sector over textile banks
Paul Ozanne, national recycling coordinator for the Salvation Army Trading Company, told letsrecycle.com: “The thing which is affecting us the most at the moment is the trend for cash-strapped local authorities out-sourcing their textile collections to private companies which means charity banks are being removed.”
However, while Mr Ozanne said that the Salvation Army is big enough “to weather this particular storm” he warned that smaller charities may suffer.
He said: “We are diverse enough to be able to make the best of a bad situation. In the long term there’s no doubt in my mind that the current trend will adversely affect many smaller charities which will have an effect on the work they do within the local communities.
“I think its short sighted for a local authority. I understand the pressure they are under but there doesn’t seem to be much consideration on the affect it will have on the big society.”
TRAID
TRAID’s national recycling manager Mike Webster also voiced his concerns. He said: “Mostly, charities can’t match the very high prices offered by private rag companies. It’s that simple.”
TRAID raises its charitable income exclusively from its national network of textile recycling banks. The charity said that its capacity to stock its charity shops “is under threat as local authorities increasingly demand payment for the right to collect textiles from council sites due to the rise in the wholesale price commanded by second hand textiles”.
Mr Webster continued: “Another area of concern is that tenders lock contractors into fixed payments per tonne over anything up to five years. The charity would be legally bound to pay a council the original sum agreed in the contract, even if textile prices plummet. This is a risk many charities are not able to take.”
He offered one solution which could benefit both charities and commercial organisations. He said: “With over 1.5 million tonnes of textile still going to landfill every year, and councils bearing no costs for the placement of banks and collection of textiles, one solution is for councils to increase the number of sites. Charities retain sites, while new ‘paid for’ sites provide an income stream for councils without putting our work at risk.”
Wales
One such case of charities being outbid was in Wales when nine local authorities joined together to procure a ‘landmark’ textile bank contract in July 2011 (see letsrecycle.com story).
The Salvation Army and TRAID were among the organisations tendering for the contract, which was awarded to JMP Wilcox. The decision was based on the quality and price of the service offered.
However James Kay, South East Wales coordinator at Resource Efficiency Wales, the consultancy that lead the procurement, said the charities had as much chance of winning the contract as a commercial organisation.
He said: “Charities did bid for the contract. It was a competitive process so they had as much chance to win the contract as any of the other bidders.”
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